After touching an intra-day high, the Sensex has slipped into the negative zone owing to the increasing pressure in the auto space and RIL. The Sensex was down 67 points at 16,795 and the Nifty lost 19 points at5,097.
In the broader markets, the smallcap index is up 0.4% outperforming the midacp index which is flat and the Sensex which is down nearly 0.3%.
Earlier in the day, after a bout of volatility in the opening trades, the markets edged higher in the late morning trades to touch a high of 16,897.
Asian shares edged higher in choppy trade on Wednesday and European stocks were also poised to gain, but the euro slipped as worries over contagion from Spain's banking sector were heightened after the country's bond yields hit record peaks.Except Straits Times all the other markets were in the green. Shanghai Composite, Nikkei, Jakarta Composite and Kospi Composite were up 0.3-1%
Among the sectoral indices, the Auto index has extended losses and is down 1.6% followed by Consumer Durables, Oil & Gas and Metal index down 0.4-0.7%.
Shares of automobiles companies were under pressure on reports that the government may impose a special tax on diesel cars. According to media reports the government plans to impose additional levies of 170,000 rupees on small diesel cars and 255,000 rupees on medium and large diesel vehicles such as sedans and SUVs. Maruti Suzuki, Mahindra & Mahindra and Tata Motors down 2-3% were the major losers.
From the Sensex stocks, Sun Pharmaceuticals, Hindustan Unilever, Coal India, Wipro and Infosys up 0.6-1% were the top gainers.
Apart from the Auto stocks, the major losers were Sterlite Industries, Hindalco, Reliance Industries, HDFC Bank and Tata Power Company down 1-2%.
Among other stocks, Speciality Restaurants rallied 14% to Rs 227, a sharpest single day gain since its listing on May 30, on back of huge volumes. As many as a combined 882,977 representing 5% of total free-float equity have changed hands on the counter till early noon deals against an average sub 370,000 shares that were traded daily in past ten trading days on both the exchanges